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Income Tax Appellate Tribunal, DELHI “B” BENCH: NEW DELHI
Before: SHRI KUL BHARAT & SHRI M.BALAGANESH
ORDER PER KUL BHARAT, JM : These two appeals filed by the assessee are directed against the common order passed by Ld.CIT(A)-28, New Delhi, dated 16.11.2018 for the assessment years 2013-14 & 2014-15 respectively. Since the similar grounds have been raised, both the appeals of the assessee are taken up together for hearing and are being decided by way of this consolidated order for the sake of brevity.
Year : 2013-14] 2. First, we take up the appeal of the assessee for the Assessment Year 2013-14 with ITA No.482/Del/2019. The assessee has raised following grounds of appeal:-
1. “That on the facts and circumstances of the case and in law, the order passed by CIT(A)-28, New Delhi (hereinafter referred to as CIT(A)), is bad in law.
2. That on the facts and circumstances of the case and in law, the CIT(A) was not justified in upholding the action of AO for assumption of jurisdiction u/s 153C of the IT Act in the case of the appellant without recording reasonable satisfaction in the satisfaction note that the documents referred to in the satisfaction note belongs to the appellant company as per the proposition laid down by the Jurisdictional High Court in the case of Pepsico Holdings Pvt.Ltd. vs ACIT 370 ITR 295 (Delhi).
3. That on the facts and circumstances of the case and in law, the CIT(A) was not justified in sustaining the addition made by the AO of Rs.3,90,00,000/- by holding that the equivalent amount of cash has been paid by the appellant for purchasing the land without considering the submission made by the appellant during the course of appellate proceedings. 4. That the appellant craves leave to add, alter, and modify any of the grounds at the time of hearing or before the hearing.” 3. Facts giving rise to the present appeal are that a search and seizure operation u/s 132 of the Income Tax Act, 1961 (“the Act”) was conducted by the Investigation Wing of the Department on 15.02.2014 in M/s AMQ India Pvt. Ltd. Certain documents relating to the assessee were found and seized. After recording requisite satisfaction on 18.01.2016, the Assessing Officer (“AO”) issued a notice u/s 153C of the Act on 21.01.2016. In response to the said notice, return declaring NIL income was submitted on 07.03.2016. Thereafter, the AO proceeded to make assessment u/s 153C/153(3) of the Act vide order dated 31.03.2016. The AO after considering the material on record, made addition of INR 3,90,00,000/- on account of unexplained investment in purchase of land u/s 69 of the Act i.e. cash component paid by the assessee.
4. Aggrieved against this, the assessee preferred appeal before Ld.CIT(A), who after considering the submissions, sustained the addition and dismissed the appeal of the assessee.
5. Aggrieved against the order of Ld.CIT(A), the assessee preferred appeal before this Tribunal.
6. Ground No.1 and 4 raised by the assessee are general in nature, needs no separate adjudication hence, dismissed.
Ground No.2 is not pressed by the assessee hence, dismissed as not 7. pressed.
The only effective Ground No.3 raised by the assessee, is against the sustaining of addition of INR 3,90,00,000/- by Ld.CIT(A).
Ld. Counsel for the assessee submitted that during the course of appellate proceedings, the AO had filed a Remand Report. He submitted that the allegation of the Revenue was that the assessee had made the payment as 50% in cheque and 50% in cash. He contended that during the course of assessment years 2013-14 & 2014-15, the assessee had purchased total land in 18 chunks by paying total consideration including registration fees of INR 2,14,15,276/- out of which amount of INR 1,89,08,226/- was paid towards stamp duty and registration charges in respect of the land and difference was paid through cash amounting to INR 25,07,050/-. He contended that authorities below mis-directed themselves by making excessive addition. He drew our attention to the submissions made before Ld.CIT(A) to buttress the contention that even if it is assumed that the assessee had made payment of equal amount in cash even then the impugned addition are excessive. As total land purchased by the assessee company during the assessment year 2013-14 and 2014-15 was amounting to INR 2,14,15,276/- out of which land amounting to INR 1,98,21,126/- was purchased during AY 2013-14 and land amounting to INR 15,94,150/- inclusive of Stamp Duty and registration was purcahsed during the AY 2014-15. Therefore, the maximum addition could be made by the AO in the AY 2013-14 of INR 1,75,10,626/- and in AY 2014-15of INR 13,97,600/-.
On the other hand, Ld.CIT DR for the Revenue supported the orders of the authorities below.
We have heard Ld. Authorized Representatives of the parties and perused the material available on record and gone through the orders of the authorities below. We are unable to accept the contention of the assessee that the entire addition related to cash payment was made purely on the basis of statement of Director of the assessee company. Infact as per the assessment order, the Director of the assessee company was confronted with the notings found on papers related to land transactions. In response to such queries, the Director of the assessee company himself admitted to have paid in cash, out of books of accounts. He quantified payment to the 50% of the such expenditure. Thus, we do not see any infirmity so far treating 50% of the expenditure as unexplained. However, if the AO is correct holding that out of total sale consideration, 50% was paid in cash and such account was not recorded in the books of accounts of the assessee. The AO could have made addition of the amount what was not recorded in the books of accounts of the assessee. Looking to the facts and material placed before us, where the AO relied on the statement of Director of the assessee company and made basis for having paid 50% of sale consideration in cash and such amount was not recorded by the assessee in its books of accounts. Thus, he treated the cash payment as unexplained amount. In our considered view, the natural corollary would be that he could not have made addition more than the cash payment which he treated to be unexplained investment. The Ld.CIT(A) also fail to advert to this plea of the assessee. We therefore, direct the AO to restrict the addition to the extent of payment made in cash and any addition made in excess of the cash payments, to be deleted. Ground No.3 raised by the assessee is accordingly, partly allowed.
In the result, the appeal of the assessee is partly allowed. [Assessment Year : 2014-15] 13. Now, we take up the appeal of the assessee in the Assessment Year 2014-15 with ITA No. 483/Del/2019. The assessee has raised following grounds of appeal:-
1. “That on the facts and circumstances of the case and in law, the order passed by CIT(A)-28, New Delhi (hereinafter referred to as CIT(A)), is bad in law.
2. That on the facts and circumstances of the case and in law, the CIT(A) was not justified in sustaining the addition made by the AO of Rs.14,,00,000/- by holding that the equivalent amount of cash has Page | 5
been paid by the appellant for purchasing the land without considering the submission made by the appellant during the course of appellate proceedings. 3. That the appellant craves leave to add, alter, and modify any of the grounds at the time of hearing or before the hearing.” 14. Facts in this case are also identical and similar as in 2013-14] except figures. Ld. Representatives of the parties have adopted the same arguments in respect of grounds of appeal.
We have heard Ld. Authorized representatives of the parties and perused the material available on record. We find that the facts and issues are similar and identical to the 2013-14] except figures. Ld. Representatives of the parties have adopted the same arguments in respect of grounds of appeal. Since the facts are identical and no change into the facts and circumstances has been pointed by the Revenue in the year under appeal, the grounds raised in this appeal filed by the assessee are partly allowed. Our decision in [AY 2013-14] would apply Mutatis Mutandi in this appeal filed by the assessee as well.
In the result, the appeal of the assessee is partly allowed.
In the final result, both appeals of the assessee in & 483/Del/2019 for the Assessment Years 2013-14 & 2014-15 are partly allowed.